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DNR extends performance bond deadline for GBP’s Talitha unit
Kay Cashman
On Sept. 13, the Alaska Department of Natural Resources’ Division of Oil and Gas approved an amendment to the Talitha unit agreement that says Great Bear Pantheon’s drilling requirement has been satisfied and effectively extending the company’s deadline to post a $3.3 million performance bond from Sept. 15, 2021, to Sept. 15, 2022.
In GBP’s request for the extension the company’s chief commercial officer and general counsel, Patrick Galvin, wrote to Division Director Tom Stokes: “It is Great Bear Pantheon’s position that the Talitha unit agreement drilling requirement was met by the drilling of the Talitha A well. That (exploration) well was drilled and logged to the base of the Kuparuk formation using the required log suite; sidewall cores were taken from each potential reservoir interval.”
Although “seasonal restrictions and operational prudence did not allow time for a flow test at all potential reservoir intervals, a flow test was conducted at the deepest of those intervals, satisfying the requirement in the unit agreement. Therefore, it is Great Bear Pantheon’s position that the bonding deadline is moot,” Galvin wrote.
“However, we understand that the Division is concerned that fluid samples were not recovered from each and every potential reservoir interval and may ultimately interpret the drilling requirement as requiring such. This amendment request … avoids the issue for the moment and provides an opportunity for Great Bear Pantheon to re-enter Talitha A in the winter of 2022 and recover additional fluid samples.”
GBP’s request was made “on behalf of leaseholders Great Bear Petroleum Ventures II LLC and Borealis Alaska LLC.”
In a Pantheon Resources Aug. 26 presentation, the company confirmed that GBP plans to re-enter Talitha A this winter.
The company also hopes to drill a Theta West exploration well in acreage adjacent to the western boundary of the Talitha unit (see related exploration story on page 1 of this issue).
Most of the Theta West leases were assigned to GBP in July and could potentially be included in the Talitha unit if the company requests it and the division approves it.
Original agreement The Sept. 13 approval was signed by the division’s deputy director, Justin Black, who provided much of the following description of the original unit agreement in his decision.
On Nov. 12, 2020, the division approved the formation of the Talitha unit and the Talitha unit agreement, appointing Great Bear Pantheon as unit operator.
The agreement established specific drilling requirements for GBP.
The agreement states the unit operator must post a performance bond in the amount of $3.3 million no later than one year from the effective date of the agreement, or Sept. 15, 2021, whichever is earlier, and must either drill one well in the unit no later than two years from the effective date; OR drill two wells in the unit no later than five years from the effective date.
If the well(s) are not drilled as scheduled, the bond will be surrendered in full to DNR on behalf of the State of Alaska, and the unit will be automatically terminated after five years from the effective date of the agreement.
Base of the Kuparuk Per the division, each well must be drilled and logged to the base of the Kuparuk formation or its equivalent, as seen at 10,375 feet measured depth in the Pipeline State No.1 well drilled by ARCO in 1988 (APO # 50-223-20016).
Each well, at a minimum, must be logged with a typical log suite, including gamma ray, resistivity and porosity logs. For any interval where logging suggests the potential for significant oil production, rotary sidewall or full core samples had to be acquired and fluid samples acquired in a flow test or by downhole sampling tool at reservoir conditions.
On June 17, 2021, GBP provided a technical review to the division to discuss the results of its operations to date; the agency’s analysis of that review was the basis for its Sept. 13 decision.
- KAY CASHMAN
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